Which One of the Following Is Not True in Consumer

question 114

Multiple Choice

Which one of the following is not true in consumer equilibrium?

• A)The total utilities of all goods are equal.
• B)The consumer is maximizing utility,given her income and the prices of goods and services.
• C)The marginal utility per dollar is equal for all goods.
• D)Given prices and her income,the consumer finds that any other choice of goods to consume would lower her utility.
• E)The consumer will not change her choices unless prices or income change.

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Definitions:

Diminishing Marginal Product

Diminishing marginal product occurs when adding an additional factor of production results in a lower increase in output, embodying the principle of decreasing returns.

Production Function

A mathematical representation of the relationship between inputs (like labor, capital) used in production and the output of goods and services that results from those inputs.

Fixed Costs

Fixed costs are expenses that do not change with the level of production or business activity.

Average-Fixed-Cost Curve

A graphical representation showing how the average fixed costs of production decrease as output increases, due to spreading fixed costs over a larger number of units.